Biden rallies Senate Democrats on spending goals after they reach $3.5 trillion budget deal

Key Points
  • President Biden met with the Senate Democratic caucus to shore up support for his sweeping investment goals on infrastructure and the economy.
  • The president's appearance at a caucus lunch at the Capitol came hours after the lawmakers announced they had reached an agreement on a multitrillion-dollar budget resolution.
  • That budget accord, which would spend $3.5 trillion over the next decade, will be added to the roughly $600 billion in new spending contained in a bipartisan infrastructure plan, Democrats said.
Senate Democrats unveil $3.5 trillion budget proposal
Senate Democrats unveil $3.5 trillion budget proposal

President Joe Biden met with the Senate Democratic caucus Wednesday to shore up support for his sweeping infrastructure and economic investment goals, less than a day after the lawmakers announced they had reached an agreement on a multitrillion-dollar budget resolution.

That budget accord, which would spend $3.5 trillion over the next decade, will be added to the roughly $600 billion in new spending contained in a bipartisan infrastructure plan, Democrats said.

A senior Democratic aide told CNBC later Wednesday that the major items in the budget framework for fiscal year 2022 include:

  • Extending the temporary tax credit expansions from the $1.9 trillion Covid relief plan that Biden signed in March. That includes the child tax credit, the earned income tax credit and the child and dependent care tax credit.
  • Funding an array of climate change programs and initiatives, with the goal of achieving 80% clean electricity and a 50% economy-wide reduction in carbon emissions by 2030.
  • Investments in child care and family programs, including universal Pre-K, paid family and medical leave, nutrition assistance and affordable housing.
  • A slew of workforce and business investments aimed at supporting small businesses, research and development improvements, and manufacturing and supply chain efforts.

The Senate leaders say the budget plan is fully paid for — a feature that could help sway moderate Democrats concerned about government spending and rising debt levels, especially in the wake of the trillions spent during the Covid pandemic.

The leading lawmakers also said that the budget would expand Medicare coverage for dental, vision and hearing benefits, which progressives such as Sen. Bernie Sanders have pushed for.

Offsets to the whopping topline price tag will come from three major categories: Tax reform, health savings and long-term economic growth.

The aide said the budget will also prohibit tax increases on family farms, small businesses and families making less than $400,000 annually.

Senate Majority Leader Chuck Schumer, D-N.Y., said Tuesday night that Biden would appear at the closed-door caucus lunch at the Capitol on Wednesday to "lead us on to getting this wonderful plan."

"We're going to get this done," Biden told reporters at the Capitol before stepping into the lunch meeting.

White House press secretary Jen Psaki tweeted Wednesday morning that the president will "continue making the case for the duel track approach to build the economy back better by investing in infrastructure, protecting our climate, and supporting the next generation of workers and families."

She noted in a follow-up that she misspelled the word "dual."

Democratic leaders hope to push versions of the resolution through the House and Senate before lawmakers leave Washington for the August recess.

But they acknowledged Tuesday night that their work is cut out for them because the budget plan offers only a broad outline on spending that would have to be fleshed out in subsequent legislation.

"We know we have a long road to go," Schumer said.

"I make no illusions how challenging this is going to be," said Sen. Mark Warner, D-Va., vice chair of the caucus.

The resolution, if approved, would pave the way for Democrats to pass a later spending bill in the Senate through the so-called budget reconciliation process. That means Democrats would need only a simple majority in Senate — which is evenly divided 50-50 with Republicans — rather than the 60 votes that the GOP could demand through the filibuster rules.

If all 50 Senate Democrats back such a bill, they could pass it even with no Republican support, as Democratic Vice President Kamala Harris could cast the tie-breaking vote.

Senate Democratic leaders are working to satisfy both the moderates in the caucus, who have expressed unease about funding the mammoth spending plans, and the progressives who have called for much more money to be spent.

Sen. Bernie Sanders, whom Schumer credited with leading the charge to include expanded Medicare coverage in the budget resolution, and other progressives had initially pushed for a $6 trillion price limit for a budget. Biden had proposed less than $5 trillion.

Moderate Sen. Joe Manchin, D-W.V., expressed a starkly different sentiment Tuesday, telling reporters, "I think everything should be paid for. We've put enough free money out."

In a statement Wednesday morning, Manchin said he looks forward to reviewing the agreement crafted by the Senate Budget Committee.

"I'm also very interested in how this proposal is paid for and how it enables us to remain globally competitive," he said. "I will reserve any final judgment until I've had the opportunity to thoroughly evaluate the proposal."

The budget will reportedly align with Biden's promise not to raise taxes on people making less than $400,000 annually.

Sanders said Tuesday night the legislation demonstrates that "the wealthy and large corporations are going to start paying their fair share of taxes, so that we can protect the working families in this country."

Another progressive, Sen. Elizabeth Warren, D-Mass., told NBC News that she hoped Biden will assure the caucus that he is "going to put all his energy into making this happen."

Warren also said she wanted to hear from the president about how their efforts will impact key policy areas, "because of all of those pieces — childcare, climate, home and community based care, the Child Tax Credit, free community college — all of those are about how we build a future going forward."

The senator added that she "will always be pushing to make the number bigger but right now, my job is to say, 'that's a lot of money.'"